OPEC Expected to Up Production Quota—What's the Trade?

OPEC will increase its oil production quota for the first time in 2 1/2 years when the organization meets on Wednesday, sources tell CNBC. The amount by which the quota will go up, however, is still under discussion.

At present, OPEC's production quota lies at 24.845 million barrels per day, CNBC's Melissa Francis reports. By some accounts, actual production is above 26 million barrels a day. The total amount produced will exceed that number, however, should OPEC raise its production quota.

Founded in 1960, the Organization of Petroleum Exporting Countries consists of the world's major oil-producing nations. The organization coordinates petroleum policies of member nations, thereby managing the supply of oil and setting oil prices.

What's the Trade?

The news changes the way Veracruz founder Steve Cortes is going to trade oil . While he currently has no position in oil, he's very bearish on energy. A production quota increase could change that, though.

"I think it's very good news for middle class consumers. When you look at gasoline futures, for instance, about six weeks ago, they were trading about $3.40 a gallon. Now back below $3 a the wholesale level," Cortes explained. "That is very significant for middle class earners and I think it's very good news for stocks, like Walmart ."

CNBC's Darren Rovell reports NBC will get the rights to a new four-game Olympic Games deal. Discussing OPEC's impact on shippers, with Urs Dur, Lazard Capital Markets, and the Fast Money traders weigh in on today's trades to play.

"I think the oil market right now expects a 1.5 million barrel per day increase. They are over-producing right now. The compliance rate is 69 percent and longer-term, as the second-half of this year approaches, I don't think it's going to matter," Terranova said. "Demand is going to rise, the price of oil is going up."

Urs Dur, senior vice president of equity research at Lazard Capital Markets, thinks a production quota increase will help the oil tankers, too. Dur is relatively bullish on large tanker owners, like Overseas Shipholding Group, Frontline and Nordic American Tanker. He currently has a 'buy' rating on OSG and is 'neutral' on FRO and NAT.

Dur added that shippers UPS and FedEx could also benefit from increased oil production, as it will eventually lead to lower gas prices.

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Trader disclosure: On June 6, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Cortes owns (GOOG). Steve Cortes is short (BIDU). Steve Cortes is short Nikkei. Steve Cortes is short Australian dollars. Steve Cortes is short silver. Steve Cortes is short EUR. Patty Edwards is long canadian dollar FXC. Patty Edwards is long (XLK). Joe Terranova owns (XOM), (KSS), (CVI), (OXY), (TM), (BJ), (DIS), (PFE), (V), (HPQ), (FLX), (JPM), (MCD), (PEP), (VRTS). Joe Terranova is short (DELL).

Joe TerranovaTerranova is Chief Market Strategist of Virtus Investment Partners, LTDVirtus Investment Partners Owns More Than 1% Of (ABAX)Virtus Investment Partners Owns More Than 1% Of (AMKR)Virtus Investment Partners Owns More Than 1% Of (CCG)Virtus Investment Partners Owns More Than 1% Of (CASS)Virtus Investment Partners Owns More Than 1% Of (CSWI)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (FCFS)Virtus Investment Partners Owns More Than 1% Of (IGE)Virtus Investment Partners Owns More Than 1% Of (KRC)Virtus Investment Partners Owns More Than 1% Of (LDR)Virtus Investment Partners Owns More Than 1% Of (NRCI)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (XLV)Virtus Investment Partners Owns More Than 1% Of (XLP)Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (XLE)Virtus Investment Partners Owns More Than 1% Of (XLF)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (XLK)Virtus Investment Partners Owns More Than 1% Of (XLU)Virtus Investment Partners Owns More Than 1% Of (SUBK)Virtus Investment Partners Owns More Than 1% Of (WDFC)Virtus Investment Partners Owns More Than 1% Of (YDNT)Virtus Investment Partners Owns More Than 1% Of DOMINO'S PIZZA UK & URL PLCVirtus Investment Partners Owns More Than 1% Of (DRYS)

Urs DurLazard Freres & Co. LLC has received compensation for investment banking services from (NMM) and (STNG) within the past twelve 12 months.Lazard Capital Markets LLC has acted as manager or co-manager of a securities offering on behalf of (NMM) and (STNG) within the past twelve 12 months.